Swiss inflation falls, tests SNB’s determination to raise rates

Swiss inflation fell to its lowest level in a year and a half, testing the resolve of SNB officials.

SNB officials have hinted that monetary policy may be tightened further in September.

Data from the Swiss Statistics Office showed that consumer prices rose 1.6% in July from a year earlier, down from 1.7% in the previous month.

That was the lowest growth among developed countries and matched the median forecast.

The slowdown was largely due to lower costs of air travel, tourism expenses and women’s clothing.

Underlying inflation, which strips out volatile factors such as energy, edged down to 1.7%.